Just a few months ago, Lithuania was barely noticed in China. No surprise, as Lithuania is a European country with a population eight times smaller than the city of Beijing. However, it now seems to be among the top issues for Chinese foreign policy.
Lithuania recently opened a Taiwanese representative office. Only the breakaway region of Somaliland also uses the name “Taiwan” for such an office. Other trade representative offices in Europe and the U.S. bear the title of Taipei, the Taiwanese capital city; a small group of countries also recognize Taiwan as a sovereign nation.
It drew a harsh response from the Chinese government. From the perspective of the Chinese Communist Party, Lithuania’s decision undermines China’s sovereignty and territorial integrity. Beijing sees Taiwan as an integral part of China and objects to its attempts to have an independent foreign policy. On the other hand, Lithuania denied that the title of the representative office means a shift in its official adherence to the One China policy.
The Global Times, the English-language tabloid under the auspices of the Chinese Communist Party, expressed its fury by stating that Lithuania was “just a mouse, or even a flea, under the feet of a fighting elephant.” The same publication even called for joint action by China, Russia and Belarus to punish Lithuania
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.China was not hesitant to put its words into action. Beijing cut off its relationship with Lithuania by downgrading diplomatic ties to charge d’affaires, a rung below ambassador. Unofficial economic sanctions, a policy unacknowledged by China, were also imposed.
For instance, new border check obstructions arose for Lithuanian goods destined for the Chinese market. According to some estimates, Lithuania’s exports to China fell 10 times in December compared with months before. Moreover, international companies face pressure from China to cut ties to Lithuania entirely, which may have a much broader impact that is also hard to quantify.
The Lithuanian government offered compensations worth around $150 million for businesses facing China issues. Meanwhile, Taiwan announced plans to open a special credit fund for Lithuanian companies of around $1 billion. Yet the Lithuanian businesses remain ambivalent about whether compensations can cover the loss of market access.
The consequences may also be long term, as Lithuania’s economy is highly dependent on exports. While trade policy is an exclusive competence of the EU, not its member states, the European Community still lacks the policy tools to protect its market from foreign pressures effectively.
While the Chinese pressure was attributed to Lithuania’s decision to open the Taiwanese representative office, China’s grievances were broader.
For instance, Lithuania previously became the first country to pull out from the so-called 17+1 cooperation forum between China and Central and Eastern European states (other European countries are considering a similar step but have not yet followed Lithuania’s example). Moreover, Lithuania forbade Huawei’s participation in 5G development and published a report stating that Chinese smartphone manufacturers may illegally collect data and pose cybersecurity risks.
Why did Lithuania become embroiled in such a confrontation with China?
First, Lithuania has strong pro-freedom and anti-communist sentiments. Last month, Lithuania commemorated the events of Jan. 13, 1991, when 14 peaceful protesters were killed in Lithuania while attempting to defend the newly independent country from Soviet aggression. The Lithuanian experience of standing up to a more potent antagonist somewhat resembles the current struggles of the Taiwanese people.
Second, Vilnius sees it as an opportunity to increase cooperation with the U.S. Decision-makers in Lithuania have noticed a long-term shift of U.S. foreign policy priorities toward the Indo-Pacific. It concerns Central and Eastern European countries that depend on U.S. security guarantees in the face of the ever-assertive Russia.
Hence, Lithuania seeks to stand in the vanguard of the struggle between democracies and autocracies, a core element of President Joe Biden’s foreign policy. It is an essential part of Lithuania’s long-term survival that depends on a rules-based international order.
It also puts Lithuania on the map for decision-makers in Washington who may be less familiar with countries on NATO’s eastern flank but are keen to seek partnerships in the U.S.’ long-term struggle with China.
The Chinese press scorns Lithuania as “a loyal puppet” of the U.S. In reality, Vilnius made a values-based step that it thinks can be beneficial as an investment in democratic principles and the strength of the trans-Atlantic bond. The inaugural high-level bilateral consultations between the U.S. and Lithuania
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on the Indo-Pacific in November were proof of new doors being opened for Lithuania.Most importantly, Lithuanian leaders were determined enough to ask the inconvenient question of how determined Western countries are in standing up to the Chinese pressure. EU members are not hesitant to be bold against China’s human rights abuses. The latest example is the motion passed in the French Parliament condemning China “genocide” against Uyghurs. However, there is still no coherent European policy on China.
It is also a multifaceted dilemma, as the foreign policy choices are neither cheap nor straightforward. For instance, only 13% of Lithuanians support the policy vis-a-vis China, with China’s promptly imposed economic costs being the most likely reason for the reluctance.
Lithuania may be the first to make a clear policy choice, yet the same dilemma applies to other Western countries. That makes the Lithuanian case much more decisive than just another bilateral scramble. Lithuania’s approach’s success — or failure — may have lasting consequences for the West. Whether they are ready to bear the costs of standing up for values and principles remains to be seen.
Linas Kojala is the director of the Eastern Europe Studies Centre, a think tank in Vilnius, Lithuania.
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